Optimism for the year ahead as new car registrations expected to soar
As car dealerships are now back open for walk-in sales and test drives, new car registrations are likely to see significant gains in the next few months. The latest figures from the Society of Motor Manufacturers and Traders (SMMT) showed growth in March, when the third nationwide lockdown was still in effect. New registrations have increased for the first time since August 2020 – by 11.5% compared with March last year.
Considering the difficult trading conditions affecting not only the automotive sector – which had to rely on click-and-collect as the only way to sell cars – but the entire economy, the rise in registrations early in the year is a sign of pent-up consumer demand. While online sales have kept the market alive for the past several months, almost two-thirds of UK drivers prefer to visit a dealership and see a car in person before making a purchase, according to a YouGov survey commissioned by The Motor Ombudsman – something they have been unable to do until 12th April 2021.
What the latest data from the SMMT shows
Last month was the anniversary of the lockdown to control the spread of COVID-19 in the UK and, as SMMT Chief Executive Mike Hawes has said: “The past year has been the toughest in modern history and the automotive sector has, like many others, been hit hard.”
While March has shown the first month-on-month rise in new car registrations since the summer last year, the wider picture tells there is still some way to go to reach pre-pandemic levels. According to the SMMT data, March was still short 36.9% on the 10-year March average. Petrol and diesel registrations fell by 10% and 31.4%, respectively. While MHEV registrations increased by 134.9% and BEV, PHEV and HEV saw an 80.4% year-on-year uptick.
Optimism for the year ahead
To reach pre-pandemic levels by the end of the year, the market will need to see around 8,300 new car registrations a day. According to the SMMT, the industry has averaged around 7,400 a day during the past decade, and current levels are roughly 5,600 a day, so it is a big task. However, there is optimism that dealerships once again opening their doors will encourage an influx in new car purchases.
Prior to the easing of lockdown restrictions, Mike Hawes said: “However, with showrooms opening in less than a week, there is optimism that consumer confidence – and hence the market – will return. We know we will see record breaking growth next month given April 2020 was a washout, but a strong, sustainable market is possible if customers respond to the choice and competitive offers the industry provides within the safest of showroom environments.”
Visit the SMMT website for further details.